tracked it down around Unam or some place and left the door open, or whatever was necessary to freeze it. Then they brought it into Fairbanks and they have-apparently they have authority to make you pay for the freight of goods of a perishable nature, so the people that owned that freight were forced to pay the freight bill and hire a transfer outfit to take the goods to the dump and dump it. Of course, as you know, they didn't ship the following summer because they had to have the freight in the winter, too. I forgot to mention it last time.

Senator BARTLETT. Thank you. Now we will hear Max Wells.

STATEMENT OF MAX WELLS, MERCHANT, VALDEZ, ALASKA

Mr. WELLS. My name is Max Wells, merchant in Valdez. During the course of these hearings there have been several items that I have thought of that I felt should be brought up. In one particular instance, about 3 years ago when I was president of the chamber of commerce I went to Congress representing the chamber and at that time we were trying to do something about this, what we felt was unfair competition of the Alaska Railroad. At that time we secured the rates on groceries from Seward to Fairbanks. That rate was $15 per ton. At the same time the rate on oil and petroleum products hauled in tank cars figured out at $28 a ton. The oil companies own those railroad cars, they also pay the railroad for the maintenance of them, and we tried to point out to the people of Fairbanks and gain their support, the fact that if the railroad could haul groceries which were in small lots and like that for $15 a ton, that the trucker had forced the railroad to come down to that price. But in the case of the oil where the oil companies were situated on leased ground from the Alaska Railroad, I believe they had a 20-year lease, where the railroad could cancel that lease on a 30-day notice, it has never worked out to where the oil companies could ship fuel or gasoline out of Valdez to Fairbanks because the oil companies felt-they had told us, of course verbally, that the railroad had threatened to chop off their lease on the Government property. We never could quite seem to get the report of the people in Fairbanks on that. We couldn't get it across that it was the trucker that had driven the railroad rates down on groceries where the trucker could compete, but that in the oil haul where we were prohibited from hauling, they were taking $28 a ton which was nearly twice the price that they were charging for hauling groceries up there by case lot.

The railroad made their door-to-door deliveries for the last 25 years that I know of myself. Usually your transfer outfits in your town were good businesses. They were year-round businesses. In Anchorage in 1934 and 1935 there were four or five real live concerns who were transfer outfits and that was one of the big jobs, hauling from the depot out to the merchants. Well, now, the railroad had taken care of that. They are doing that delivering themselves. I personally know of quite a number of transfers in Anchorage and Fairbanks who are practically out of business because of this fact.

The thing that gets us is the fact that here in Valdez in the past 10 years the people who have lived here have felt that the future of our town was very great, and with the help of Delegate Bartlett, before

he became our Senator, we had much assistance. For one thing, this beautiful building we are in here today was secured through Alaska Public Works appropriations which Delegate Bartlett at that time helped to arrange. We felt that we were right on the doorstep of great development here because of our location physically in this part of the State to go ahead. Consequently, the town of Valdez has built this school. They have a 16-bed hospital over here that cost in the neighborhood of half a million dollars. Also, under the Alaska public works project they put in a complete sewer system and water hydrants. We have the water system that is second to none in the State as far as good water, and like that, and the sewer system.

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But we feel that we have had a great assistance on trying to build the town. We feel that we are in the position now, we have done all the things that are necessary. If someone wants to come in to start an industry, we have a good hospital, good schools, good sewers, good water. We are all set to go, but in the last 7 or 8 years the railroad has whittled away at our main industry, which is trucking. They have driven us down to where our population has gone from approximately 1,652 down to about 500 now. As previous testimony has stated, the business here in town has dropped anywhere from 25 to 50 percent and there are a lot that are just hanging on and feel that if the railroad will ever get off our backs and let us make a living, we can have a good town here.

In regard to the truckers, Tom, for example, told me that last spring he had a customer in Fairbanks that was shipping by the railroad. When the truckers were put under the Interstate Commerce Commission which, incidentally, Valdez Chamber at the Alaska Chamber of Commerce, were the ones that proposed the resolution and it was accepted by the Alaska Chamber of Commerce and was accepted there.

Anyway, this one company that was being-the railroad was hauling their freight and I think that was in April. In May the trucking concern came out with their new tariff, which they were forced to do under the ICC, and the tariff was lowered in the railroad. Well, the company whom he was hauling for started sending then by truck because the rate was lower. Well, the trucker thought, well, that's real good. Now I've got an account here. What happens? In the month of June the railroad came around and talked to the guy, he cuts the rate down under the trucker, and the railroad has freight again. Well, now, where does the trucker go from here? I am not too well versed on the procedures, but I believe that it would take him around 6 months or something to go through the ICC to lower his rates if he could justify it. But the railroad over there, why, they can come around and drop their rate at will, they can bid on contract hauling, there is no regulation over them. We hope that they would be brought under this. That was one of the reasons; under territorial status there was nothing we could do about the railroad to get them regulated. We felt that if the truckers went under the ICC it would be so apparent and so unfair to have competition from the Government, and while the truckers were regulated and they weren't, that immediately or very shortly the railroad would be brought under the ICC. I realize that that is the reason for these hearings, and I for one certainly hope that that does go through.

That is about all I have to say.

Senator BARTLETT. Max, don't depart too hastily here, because you have suggested certain questions or counterstatements or both.

I would take it that none of us up at the head table could infer, from the manner in which you have talked, that you are about to give up, no matter how tough the going is. You are about to stay here? Mr. WELLS. I intend to; yes.

Senator BARTLETT. I thought so.

Max, as a merchant, if someone said that they would provide you with faster maritime service and would put in directly to Valdez instead of first going to Seward and/or Whittier, do you think such a service would warrant a slightly higher charge than you now pay, and would you be willing to pay a higher charge for such service?

Mr. WELLS. Well, Senator, I think the amount of air freight that the airlines to Alaska today enjoy answer that question very good. The people of Alaska are willing to pay for the service because of the tremendous volume of air freight that comes to the territory every day.

Senator BARTLETT. Max, I think you have made a remarkably good statement and it really typifies to me the attitude of the people of Valdez. I think it is simply amazing that 500 people are willing to make the sacrifices for the kind of a school you have, the kind of a water system you have, and the kind of a hospital you have, and for all these other services. And it is all the more remarkable when we understand that 500 people are here to pay for this, because you have to subtract from that number, as the superintendent of schools told me during the luncheon hour, over 170 who are in attendance at this very school. And I rather imagine that every one of my colleagues here would say that this spirit that Valdez possesses is in the best American tradition and demonstrates determination and guts to win out against all odds. I just wish every member of the Senate committee and of the House committee could be here today, and other committees in Congress concerned in any manner with Alaska, because if they were, if they could have heard the pleas and statements that all of you have made, they would be all the more sympathetic and all the more desirous of helping and would have helped.

Since that isn't the case, we will try to function for a more complete group, because I think that we will leave here with sympathetic understanding and a warm desire to help.

Thank you, Max.

Tom Jatzeck will return to the stand.

STATEMENT OF TOM JATZECK, OF VALDEZ, ALASKA

Mr. JATZECK. Mr. Barton had a question here a while ago. Mr. Barton was asking a question about deck space aboard the boat. I think I can answer that for him in short terms. It is not available for any carriers, outside of two carriers in Alaska today.

Mr. BARTON. You have attempted to get it, but have been unable to do so?

Mr. JATZECK. That's right. I attempted, and last Monday of this week I talked to Alaska Steam in Seattle and, consequently, I have been attempting for a 3-month period at a time to get deck space and I haven't been able to get it.

Senator BARTLETT. Tom, what are those two carriers, if you don't mind?

Mr. JATZECK. The carriers are the Garrison Fast Freight, Consolidated Division, and the Alaska Railroad.

Senator BARTLETT. Thank you, sir.

Are there any more witnesses? If not, the committee will stand in recess, to reconvene in the Federal courtroom at Fairbanks at 9:30 a.m., Thursday, October 29, 1959, and before formally closing, the chairman, in behalf of all of us who are here, desires to thank the people of Valdez for the bountiful, wonderful hospitality you have shown us and to thank you also for that fine luncheon. That is the first time we have had, as a group, the opportunity to enjoy Alaska salmon.

Now, the hearing is closed, but in accordance with the wish earlier expressed, we will stay right here a few moments and make ourselves available for questions on other subjects.

(Whereupon, at 3:30 p.m., Wednesday, October 28, 1959, the hearing was adjourned, to reconvene in Fairbanks, Alaska, at 9:30 a.m., Thursday, October 29, 1959.)